How To Avoid New Business Failure
Question: I hear that almost all new businesses fail, what are a few important things I need to do to avoid failure for my business idea?
Answer: Here’s the fundamental answer. Don’t be a dumbass. Don’t take your foot off the gas.
I’ve actually had this conversation this week with someone else, so it’s a common issue. I know loads of people that I call parabolic entrepreneurs. Which really means they’re a blip in the radar. In a really short amount of time, they’re able to make a good amount of money. But unfortunately, these parabolic entrepreneurs can’t sustain it. It could take a year or maybe two. It’s just like the saying “Most businesses don’t make it past 5 years alive.” It’s not about that initial homerun. That doesn’t equal strong, lasting success.
I built my agency starting with $500 a month clients. My first ever client actually paid me only $640. Which is really half of what I should have charged. The other marketing companies were charging twice as much as me, so I did what I could to snag clients.
Define what you want out of your business. Are you a lifestyle business? Meaning I just want enough money to have a good time. I just want to pay my bills, work 30 hours a week, and spend the rest of my time traveling. There’s a lot more risk that comes with running this lifestyle business. In contrast, a growth company is growing out systems, people, and scalability. Sales never stop, and hiring never stops in these environments. You’re always pushing. There’s nothing wrong with a lifestyle company. I’ve been in that spot before. In fact, I didn’t even know I was there. I thought I was working really hard and doing my thing, I wasn’t thinking about it in terms of revenue progression. Human beings just get complacent. It’s tough to get out of bed every morning and just expect to be hyper-motivated when you sleep in silk sheets. People get too comfortable.
Obviously, life happens and things go wrong. You get a bad employee, or you’re threatened by people who are out to harm the company. That’s a real hurdle to overcome.
But, there’s also bad entrepreneurs.
To succeed I say, go for broke every day, every week. Make sure your output matches what you claim your goals are. Because if you’re just rolling into the office working a few hours here, touching base just a little bit, and then heading straight for the driving range or the gym, don’t expect much. Entrepreneurs who go to the gym in the middle of the day are lifestyle businesses.
If you’re one of these people, and your business fails, that’s why.